Thursday, 26 July 2012

Runway spending

Valencia has applied to the central government in Madrid for financial assistance, being unable to cut its budget to the extent required of it. Murcia has followed suit. Catalunya has joined them. According to El País, writing just before Murcia made its application, Castilla La Mancha, Andalucía and Canarias are likely to follow.

There are a few different ways of looking at this. One is that Valencia, Murcia and Catalunya are all led by the aggressive Right, a point that may escape commentators outside Spain, especially those whose knowledge of Spain is small but whose desire to characterise Spanish politicians as all the same is greater.

In Spain, however, it has not escaped our notice that Valencia is a major stronghold, perhaps the major stronghold, of the Partido Popular, or to put it another way that is not in fact another way, that it is the heart of political corruption in Spain, even more than the Balearics. Nor that it was held up by Mariano Rajoy, before he was Prime Minister, as a model for the rest of Spain to follow.

Murcia, for its part, is as rightwing a province as Spain possesses, give or take Cantabria. And Catalunya is run by politicians whose two most noticeable tendencies are to blame Madrid bitterly for all of Catalunya's problems and to agree wholeheartedly with Madrid when it comes to economics.

Another pertinent observation to make about all three comunidades is that they have been making gigantic cuts, leading to strikes and huge street protests, especially in Valencia and Barcelona. (And Castilla La Mancha, whose leader, the unspeakable Dolores "Tres Sueldos" La Cospedal, is met with whistle-protests wherever she goes.) And another one is that they have been doing so in order to try and meet deficit-cutting targets set by central government, a task in which they are not succeeding. Hence their application to central government for funds.

It's both worth making that observation and futile to make it, and for the same reason: which is that the narrative with which we are presented is of grotesquely overspending regional governments which have brought down the national economy. This narrative is not a true one. But as with so much in this crisis, the narrative is going to prevail regardless of how little it is true.

There is a saying that data is not the plural of anecdote. This, too, is true, and nevertheless doesn't matter. How much local and regional government spending has actually been wasteful? I've never seen any attempt to quantify it. Instead, they just tell you about the airports.

The airports have been expensive, wasteful and stupid, for sure. Huesca airport is closed, other than, apparently, its restaurant. A very decent restaurant, according to anecdote, but a very stupid airport nonetheless. As far as I am aware it has only ever been used by Pyrenair, a short-lived, swiftly bankrupt airline offering package trips to the Spanish Pyrenees (further from Huesca Airport than Luton Airport is from London) and SD Huesca when playing away games in places like La Coruña.

Huesca Airport is not as well-known a disaster as some, largely because Huesca is a faraway country of which the Madrid-based press knows little (when we go to the capital, most people either do not know where Huesca is, or mistake it for Huelva, or assume we live in the mountains). Ciudad Real (which you may read about here) is mentioned more often but the most-quoted example by far (for which, see here) is Castellón.

This was the case even before the recent, unpunished activities of Ana Fabra. But her old man was responsible for building the thing, which does tend to draw attention to a waste of money rather more extensive than spending it to help the unemployed avoid begging and starvation. Still, fuck 'em.

Fair enough. I have no objection. Stupid projects are stupid projects. Even in our village there is a new dance hall, next to our huerto - serving a village with a permanent population of about twelve people. About three of whom dance there. Yes, it brings people in from other places. Not that they spend money here - we have no bars, no shops. Yes, if it's raining during the fiestas we can hold the cena there. But really, is it worth it?

But by the same token, if it is a waste of money, how much has it wasted? Compared to the whole? (And how much when compared with the waste that will be involved in exploding our economy to meet deficit targets and recapitalise bankrupt banks?) How much? And what does it prove?

As Miguel-Anxo Murado observed, three months ago:
When you have 17 regions, you're likely to find examples of whatever you look for, including mismanagement of funds and even corruption. I have criticised them myself in my own region, many times. The question is how representative they are. Not very, I think.

The origins of the regional deficit are the same as the central deficit: not over-expending but the fall in tax revenue due to the economic slowdown. This is aggravated in the case of the regions because it is the central government that collects most of the taxes, and then decides how much it gives back to them. As a whole, the regions are responsible for less than a third of the total Spanish debt, yet they have to do more than a third of the total public expending. And it's not in jails or airports that they spend most of it, but in healthcare, education and other basic services, which in Spain are fully decentralised.
Quite so. But then again, who cares? We know that it is all the fault of regional governments, we know that they are addicted to spending and we know that because of the airports. And not just the airports, to be sure. But the airports come up time and again.

The disaster that is befalling Spain has many more important causes than failed prestige projects, just as it has many more important causes than the holiday and pension arrangements of functionarios. Or the labour market. Or, for that matter, the mendacity and incompetence of the Rajoy administration, heavy though it be in both deficiencies.

But these causes are less tangible. They often lie outside Spain. And they are not causes which it suits powerful people in Europe to point at, since it would involve pointing at themselves.

Truth is that in Spain we didn't have a crisis until Zapatero was ordered to embark on austerity. Difficulties, yes, and very serious ones. But not a crisis. And we didn't have a disaster until the PP piled on the austerity further. A crisis, yes, but not a disaster. And now we are waiting for the disaster to turn into Armageddon.

Murado wrote more recently:
What is really puzzling is how little attention is being paid to the fact that these measures aren't working.
But it's not really puzzling though. It's not really puzzling at all.

It's just a question of what suits. Of what story suits.

As well as one of PP suits. Fuck them too.

EDIT: No sooner written than blow me, the BBC do Ciudad Real airport

 [Villareal image: Un Mundo Peculiar]

1 comment:

  1. I thought that the number of unoccupied building sites in Southern Spain I witnessed in 2009 already represented a crisis. The fact that there was little publicity about this then merely confirmed my suspicions. I presume that the lack of a Malaga Open this year is the result of regional budget cuts. Haven't seen so much evidence in Pamplona, other than a few bars for sale rather than just on holiday.

    I'm sure that Ed Balls would advocate spending more as a way out of the disaster. But as with the UK, I fear that it would accelerate the path to Armageddon.

    I fully acknowledge that you know far more about the situation than I do. I have huge sympathy and no solutions. This may qualify me as a bug-eyed internet free-market theologian and a sound-money bore so feel free not to publish!